Premier Foods ups profit guidance as sales beat market forecasts
Mr Kipling owner Premier Foods has lifted its profit guidance for the full year to £125m as sales beat expectations.
The owner of household brands such as Cadbury’s, Mr Kipling, Ambrosia, Angel Delight, Sharwoods, and Oxo said trading profit for this financial year is now expected to be at least £145m and adjusted profit before tax at least £125m.
It comes after sales narrowly beat market expectations in the third quarter. While brokers at Peel Hunt predicted that third quarter sales would be up six per cent compared to two years ago sales rose by seven per cent according to a trading update from Premier Foods today.
“The strong momentum from the first half of the year continued into the key Q3 trading period, with our brands growing by 11.3 per cent compared to two years ago,” said chief executive officer Alex Whitehouse.
“We’re particularly pleased with the performance of our Sweet Treats business. This was Mr Kipling’s biggest Christmas ever, as our Sweet Treats brands outperformed the market, growing 6.3 per cent compared to last year and 11.6 per cent versus two years ago, helped by an increased number of family gatherings over the festive period,” he added.
While sales are growing on a two year basis Premier Foods saw a decline of 1.8 per cent in the third quarter compared to last year and are down 4.6 per cent this year to date.
“Sales and profits were unsurprisingly behind last year, given the pandemic-related surge,” said analysts at Peel Hunt, who labelled the stock a buy in November. Share price has remained flat at 111p since the November update in which the brokers said company shares “look excellent value to us” becuase of a “strong underlying revenue and margin performance.”
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